Beyond Spreadsheets: Why Every Modern CFO Needs a Finance Data Warehouse

Central to successful financial decision-making is the availability and integration of relevant financial and operational data. Although spreadsheets were apt for a time when data existed in isolated silos, contemporary businesses thrive in a profoundly interconnected environment. Having critical financial and operation information tailored for finance in an intuitive and easy-to-use central data warehouse removes significant risks, makes any reporting and/or ad-hoc analysis faster, and means the Finance function is positioned to add value.

Apart from the obvious General Ledger, Finance often need broader business data for specific Finance use cases and/or to answer particular Finance style questions such as regulatory reporting or forecasting. Finance must control their data and directly influence how it is structured and maintained. Although broad business-wide datalakes or data warehouses are to be applauded and are often a very useful data source, they should not negate the need for a tailored finance-specific data warehouse whose primary purpose is to support Finance reporting, forecasting and efficiency.

As organizations grow, so does their financial and related operational data volume. Spreadsheets, albeit convenient, have limitations in managing vast quantities of data, often leading to performance issues. A finance data warehouse, however, is inherently designed to handle large datasets, ensuring that CFOs can retrieve and analyze information rapidly, irrespective of its volume. Importantly, if the data warehouse is finance-centric and well-designed, the enormous amount of time wasting associated with using Excel to ‘format’ or ‘pivot’ the data also becomes redundant.

It also means that other popular tools become more effective. Tools like Power BI become far more useful when the underlying data sets are clean, trusted and designed for Finance.

In the world of finance, precision is non-negotiable. Manual data entries on spreadsheets are prone to human error, potentially leading to significant financial discrepancies. Data warehouses automate much of the data aggregation process and can include their own controls and reconciliations. This dramatically reduces the risk of errors and enhances data integrity.

In addition, as businesses evolve and new accounts get added or new cost centres are introduced, a well-designed finance-specific data warehouse (and associated reporting) will automatically handle these changes. If ‘manual’ management accounting adjustments, eliminations or allocations are required, then having these set and centralised in the Finance data warehouse and fully controlled by Finance will save significant time, reduce risk and increase accuracy. For instance, it is not uncommon for Brydens BI clients to have their CALUMO solution auto-generate cost allocations based on rules they define and have these form part of their management reporting with the option to generate an actual journal also available.

Similarly, reports set up in Power BI are far more effective if the team trusts the underlying data and knows that the underlying database is dynamically updating.

Businesses are moving faster. Waiting for month-end reports or quarterly analyses no longer suffices. Modern companies demand up-to-date data, and timely insights to respond swiftly to market dynamics. A finance-specific data warehouse that is connected to critical finance and operational data sources can provide essential reporting and advanced analytics in near-real time. This allows CFOs to oversee agile and informed decision-making. It also means that rolling forecasts become a standard tool, underpinned and automatically informed by models tied to actual financial and operational data.

Many Brydens BI clients have monthly rolling forecasts as standard. As we have implemented rolling forecasts and then continue to support them, it becomes clear that these businesses become much more forward-looking, and Finance becomes far more central to decision-making,

Beyond mere data storage, finance data warehouses are equipped with powerful analytical tools and centralise things like mapping to avoid the tedious use of VLOOKUPs often repeated across Excel workbooks. Brydens BI has designed, set up and continues to support dozens of Finance-specific data warehouses. By leveraging code and the power of databases, we see these being leveraged to run complex financial models, predictive analyses, and the automation of once time-consuming processes like allocations, consolidations, and eliminations. We also see CFOs continue to push the boundaries as they leverage their finance-specific data warehouse to answer challenges or key process challenges specific to their business.

This approach also lends itself to adopting Artificial Intelligence and Machine Learning, with several Bryden’s BI clients now using these technologies to understand better what might happen next and/or identify areas that need greater scrutiny.

Whether using sophisticated tools like Calumo, reporting in Power BI or even exposing data in Excel, ensuring the Finance team (and broader business) is using the same, trusted (and enhanced) finance data from a central finance-centric data warehouse removes significant risk from the business, saves time and unlocks much potential.

In an era where data breaches can spell monumental crises, ensuring the security of key financial and operational data is paramount. Data warehouses can leverage robust security protocols to minimise the risk of unauthorized access or breaches.